How Russia is surviving NATO-backed sanctions

[Jamala]

It didn’t take long after Russia invaded Ukraine in February 2022 for NATO countries to throw sanctions down on Putin's economy, all designed to destroy Russia and it's citizens like Venezuela, from transacting on the global market. The sanctions were the broadest and harshest, coming almost weekly, and severing Russia's link with SWIFT, sometime akin to Dvaid Trezequet goal against Italy in EURO 2000, a golden goal.How could a country so dependent on selling fuel overseas ever recover from that?
“What we’ve done to Russia over the last weeks has blown the top off sanctions,” Julia Friedlander, director of the Economic Statecraft Initiative at the Atlantic Council, told a magazine last March. A year later, Russian troops are still carrying out their SMO.
 It has been proven that sanctions are almost never effective at forcing countries to change their behavior. However, the fact that the Russian economy has fared far better than anticipated in the face of wartime sanctions is more surprising. In 2022, its economy shrank 2.1% — substantially less than the 10-15% some forecasters made when sanctions first hit last March
Why did the experts get it wrong? Or, in other words: How did Russia’s economy prove resilient in the face of such heavy sanctions?
According to a senior economist,  Moscow has been "sanctions-proofing its economy" since 2014, when Russia annexed the Crimea and faced its first round of sanctions. This involved shedding of external debts by companies and banks, subsequently diminishing their dependence on Western funding. Russian consumers experienced a severe pinch as a result of being suddenly deprived of imports during the initial weeks of sanctions. However, Russia quickly shifted its focus and began importing consumer goods primarily from or through China, Kazakhstan, and Turkey.












https://qz.com/how-russian-economy-survived-a-year-of-sanctions-1850144335

[Tytanowy Janusz]

you make one mistake in your reasoning that leads to completely wrong conclusions. You forget that such a large organism as a country with over 100 million citizens, with the largest area, based on strategically important raw materials, does not collapse in one day. These are the months/years during which little can be seen until the subcritical stage is reached, which is the beginning of rapid changes. So the fact that russia hasn't collapsed in 1 year is not proof that russia's economic isolation doesn't work.

What we already see:
1- the Russian currency has lost 30% against the dollar in the last 100 days
2- in the first three months of 2023, russia exceeded the budget deficit planned for the whole year
3- demographic problems caused by young people fleeing the country
4- rising tensions in some regions of Russia, which may result in a breakaway from Russia.

Why 2022 wasn't so bad for russians? Because of the inflationary panic and unrest related to the war that inflated the prices of raw materials in the short term, which increased the revenues to the budget. The temporary pump is over, raw materials are back down to the levels prior to the war, and the beginning of 2023 looks like the beginning of a disaster.

[Rikafip]

First of all, no one seriously expected that country size of Russia collapse after one year of sanctions, like no one expected (expect few haters) that Europeans will freeze to death last winter. I mean, just take a look at North Korea, Cuba and other similar countries, they are under sanctions for decades and yet still somehow their political system survives. Sure they are not in war like Russia is which is way more demanding, but still.

To put it simply, Russia survived and can survive many years of such sanctions because majorify of their people are used to be treated bad and to have generally low quality of life so for them its just business as usual. These sanctions can even help their regime to sell the bullshit how that is another proof that everyone is against them and they have to stick together etc.

[EarnOnVictor]

First of all, no one seriously expected that country size of Russia collapse after one year of sanctions, like no one expected (expect few haters) that Europeans will freeze to death last winter. I mean, just take a look at North Korea, Cuba and other similar countries, they are under sanctions for decades and yet still somehow their political system survives. Sure they are not in war like Russia is which is way more demanding, but still.

To put it simply, Russia survived and can survive many years of such sanctions because majorify of their people are used to be treated bad and to have generally low quality of life so for them its just business as usual. These sanctions can even help their regime to sell the bullshit how that is another proof that everyone is against them and they have to stick together etc.

I'm with you on this, Russia is feeling the heat, no doubt. But the fact that the country is big and was prospering will not make it have much effect on them soon, but it should be in years. Russia will continue to have their countermeasures, but it should not dare to do more than what they have done in Ukraine now. The country is enjoying the benefits of not being the war location, yet the economic sanction on them will last long and the effect will continue to bite slowly.

[Fortify]

It didn’t take long after Russia invaded Ukraine in February 2022 for NATO countries to throw sanctions down on Putin's economy, all designed to destroy Russia and it's citizens like Venezuela, from transacting on the global market. The sanctions were the broadest and harshest, coming almost weekly, and severing Russia's link with SWIFT, sometime akin to Dvaid Trezequet goal against Italy in EURO 2000, a golden goal.How could a country so dependent on selling fuel overseas ever recover from that?
“What we’ve done to Russia over the last weeks has blown the top off sanctions,” Julia Friedlander, director of the Economic Statecraft Initiative at the Atlantic Council, told a magazine last March. A year later, Russian troops are still carrying out their SMO.
 It has been proven that sanctions are almost never effective at forcing countries to change their behavior. However, the fact that the Russian economy has fared far better than anticipated in the face of wartime sanctions is more surprising. In 2022, its economy shrank 2.1% — substantially less than the 10-15% some forecasters made when sanctions first hit last March
Why did the experts get it wrong? Or, in other words: How did Russia’s economy prove resilient in the face of such heavy sanctions?
According to a senior economist,  Moscow has been "sanctions-proofing its economy" since 2014, when Russia annexed the Crimea and faced its first round of sanctions. This involved shedding of external debts by companies and banks, subsequently diminishing their dependence on Western funding. Russian consumers experienced a severe pinch as a result of being suddenly deprived of imports during the initial weeks of sanctions. However, Russia quickly shifted its focus and began importing consumer goods primarily from or through China, Kazakhstan, and Turkey.

You look like a transparent Kremlin sheep posting propaganda and then disappearing back into the hell you came from. Nobody with a brain expected Russia to vanish or implode after sanctions. It has had a life altering impact on the average Russian citizen however. No more tourists with easy visits to their European neighbors, who have some of the best culture and sights in the world. No more fancy brands that have the best quality and highest tech. No more selling your oil and gas at full prices, just taking whatever scraps China and India will throw at you - getting pennies on the dollar. This is also hiding the fact that we knew Russia had economic reserves, they were built up in anticipation of their invasion and they gave Russia the ability to burn money for a year or two. After that, as we see with the plummeting Ruble, they ran out of time. It's going to get a lot worse now they're a year in and have burned through their safety net.

[kryptqnick]

Through strict but smart policies and unfortunately a fairly strong international influence despite being a terrorist state, Russia has indeed survived the sanctions somewhat better than many expected. But others pointed out facts that go against the op's portrayal of events, and I agree with Fortify that the op looks like a person who is spreading Russian propaganda here on the forum.
That being said, harsher policies against Russia are clearly needed to achieve the goal of sanctions, which was and remains the following: ensure that Russia becomes too weak economically to continue its war against Ukraine. Too much business is going as usual, too many areas are unaffected by sanctions so far.

[Ozero]

Although most of the sanctions imposed against Russia are of an economic nature, it is wrong to say that they are primarily directed against the Russian economy and have the goal of destroying it. The sanctions were introduced in stages after Russia's full-scale military invasion of Ukraine, and they aim at Russia's inability to continue the war. Considering that Russia is heavily dependent on the technologies of the United States and the West, first of all, the possibility of manufacturing high-precision weapons was blocked, and here sanctions have achieved significant success.

  During the year of the war under sanctions, Russia has only about 15 percent of precision-guided missiles left, and the possibilities for their production are very limited. Russia no longer has the ability to produce aircraft, helicopters and armored vehicles, especially with the latest modifications.

Russia has already brought almost all of its weapons reserves into battle in Ukraine, even the old T-55 tanks, which were produced in the 50-70s of the last century, have been reactivated. Therefore, they are going to be used as stationary artillery points, dug up to the very tower into the ground. The possibility of removing World War II T-34 tanks from pedestals throughout Russia and making them a separate unit is being discussed quite seriously.
Putin also acknowledged the significant impact of economic sanctions recently at a government meeting. Therefore, sanctions inevitably work.

[BADecker]

you make one mistake in your reasoning that leads to completely wrong conclusions. You forget that such a large organism as a country with over 100 million citizens, with the largest area, based on strategically important raw materials, does not collapse in one day. These are the months/years during which little can be seen until the subcritical stage is reached, which is the beginning of rapid changes. So the fact that russia hasn't collapsed in 1 year is not proof that russia's economic isolation doesn't work.

What we already see:
1- the Russian currency has lost 30% against the dollar in the last 100 days
2- in the first three months of 2023, russia exceeded the budget deficit planned for the whole year
3- demographic problems caused by young people fleeing the country
4- rising tensions in some regions of Russia, which may result in a breakaway from Russia.

Why 2022 wasn't so bad for russians? Because of the inflationary panic and unrest related to the war that inflated the prices of raw materials in the short term, which increased the revenues to the budget. The temporary pump is over, raw materials are back down to the levels prior to the war, and the beginning of 2023 looks like the beginning of a disaster.

You make one major mistake in your thinking. Your view is from a US/Nato point rather than from the Russian point of view.

Russia would have liked to have traded with the US and Nato. But the sanctions only made her move on to solidifying BRICS and adding new applicants for it, and operation her economy in ways she wasn't ready for, then. Besides, many US and Nato companies are trading with Russia under pseudonyms. Russia is doing just fine, but her success can't be measured by US/Nato methods of measuring.

[Tytanowy Janusz]

You make one major mistake in your thinking. Your view is from a US/Nato point rather than from the Russian point of view.

"The first casualty of War is Truth" - Its possible that I don't have full knowledge because both sides of the conflict are trying to manipulate the data to their advantage. No doubt about that.

Russia is doing just fine, but her success can't be measured by US/Nato methods of measuring.

Name a measuring method which proves that "Russia is doing just fine".

[be.open]

Name a measuring method which proves that "Russia is doing just fine".

Here is an interesting article in the Washington Post about this. Its essence is that more than 90% of Western sanctions against Russia are a fiction. It seems that few Western companies want to lose the Russian market, even declaring the opposite in words. Maybe that's why the effectiveness of sanctions is so low?

[paxmao]

Name a measuring method which proves that "Russia is doing just fine".

Here is an interesting article in the Washington Post about this. Its essence is that more than 90% of Western sanctions against Russia are a fiction. It seems that few Western companies want to lose the Russian market, even declaring the opposite in words. Maybe that's why the effectiveness of sanctions is so low?

There is no problem selling coffee to the RF citizens, nor even providing consulting. That is absolutely fine. Now, try to find the technology you need to produce modern means of fighting and modern means of production and you will know why there are T-55s in the frontlines. What is next? T-34s?

The RF economy is unlikely to collapse big time like a super-nova style explosion. But the erosion is there, as it happened with the USSR: the young and prepared leave, the citizens have to be forced into conscription, growth is stagnant for a BRIC country...

But what is more, things are unlikely to go back to where they were. Putin's war of aggression has permanently damaged RF stance in the world.

[be.open]

Name a measuring method which proves that "Russia is doing just fine".

Here is an interesting article in the Washington Post about this. Its essence is that more than 90% of Western sanctions against Russia are a fiction. It seems that few Western companies want to lose the Russian market, even declaring the opposite in words. Maybe that's why the effectiveness of sanctions is so low?

There is no problem selling coffee to the RF citizens, nor even providing consulting. That is absolutely fine.

At least now you understand why people in Russia don't take to the streets to overthrow Putin. Very little has changed in their daily lives since the start of the special operation in Ukraine.

Now, try to find the technology you need to produce modern means of fighting and modern means of production and you will know why there are T-55s in the frontlines. What is next? T-34s?

The RF economy is unlikely to collapse big time like a super-nova style explosion. But the erosion is there, as it happened with the USSR: the young and prepared leave, the citizens have to be forced into conscription, growth is stagnant for a BRIC country...

But what is more, things are unlikely to go back to where they were. Putin's war of aggression has permanently damaged RF stance in the world.

I do not think that Russia has any serious problems with the production of modern types of weapons. I don’t know where you got this story about the T-55 from, but this is hardly a mass case, perhaps a single episode, or even a fabrication of Ukrainian propaganda. The Nizhny Tagil UralVagonZavod alone produces several thousand armored vehicles a year, including hundreds of T72B3 and T90M main battle tanks. This is several times more than the entire united West can transfer to Ukraine without compromising its own combat readiness.

[BADecker]

You make one major mistake in your thinking. Your view is from a US/Nato point rather than from the Russian point of view.

"The first casualty of War is Truth" - Its possible that I don't have full knowledge because both sides of the conflict are trying to manipulate the data to their advantage. No doubt about that.

Russia is doing just fine, but her success can't be measured by US/Nato methods of measuring.

Name a measuring method which proves that "Russia is doing just fine".

It's called BRICS. You can ask the Russians how the measurement works. Brazil is the first letter of BRICS, and Russia is the second letter. Figure it out.


Ooh Lula La! Brazil Wants To Dedollarize Too


https://www.zerohedge.com/economics/ooh-lula-la-brazil-wants-dedollarize-too
Friday saw US Treasury yields 10-12bps higher and the curve flatter after headline retail sales were lower but strong core, Michigan year-ahead inflation expectations leaped from 3.6% to 4.6%, the Atlanta Fed wage tracker showed steady *positive* real wage growth for job switchers and stayers, and the heads of JP Morgan and Blackrock both said they don't see inflation falling back rapidly, and that US rates will stay higher for longer. The Financial Times ('Why economists are learning to speak human') also mentioned Polanyi's view that markets sit on politics and society --e.g., 2016's 'Thin Ice' said the global neoliberal architecture would crack once the US saw China as a hegemonic rival; or the surge in US investment being seen under the IRA, as noted in the press today-- stressing this will continue; as will related arguments over redistribution; as will financial repression that keeps inflation higher than bond yields to reduce debts.

On Sunday, Yellen said credit tightening is de facto Fed rate hikes --not her job-- and that "There is a risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar," even if this is not "easy" to do. That kind of talk raises structural inflation risks, as do a flurry of related geopolitical developments:

US regulators are focusing on hedge funds and shadow banking, following on from crypto.

Germany shut its final three nuclear power plants despite energy tail risks ahead.

A US intelligence leak says China secretly agreed to send Russia lethal aid, as a defence minister visit looms, and the Kyiv Independent says Chinese components are in Russian supplies. China would gain swift air superiority over Taiwan, according to the same source.
...

[Tytanowy Janusz]

Name a measuring method which proves that "Russia is doing just fine".

It's called BRICS. You can ask the Russians how the measurement works. Brazil is the first letter of BRICS, and Russia is the second letter. Figure it out.

Ooh Lula La! Brazil Wants To Dedollarize Too

"and over 16% share in the world trade*." yep. only 16% ... including BRICS/nonBRICS countries trades settled in dollars. So non dollar trades are most likely below 10%. Nothing to be worry about so far.

Countries can try to dedollarize, but people will run to the dollar either way. Nobody wants Russian or Chinese currency. Countries where you can go to jail for saying something that goes against local propaganda.

The fact, that russia is part of BRICS (so far) is not a "measuring method" which proves that "Russia is doing just fine".

"Figure it out."

[BADecker]

Name a measuring method which proves that "Russia is doing just fine".

It's called BRICS. You can ask the Russians how the measurement works. Brazil is the first letter of BRICS, and Russia is the second letter. Figure it out.

Ooh Lula La! Brazil Wants To Dedollarize Too

"and over 16% share in the world trade*." yep. only 16% ... including BRICS/nonBRICS countries trades settled in dollars. So non dollar trades are most likely below 10%. Nothing to be worry about so far.

Countries can try to dedollarize, but people will run to the dollar either way. Nobody wants Russian or Chinese currency. Countries where you can go to jail for saying something that goes against local propaganda.

The fact, that russia is part of BRICS (so far) is not a "measuring method" which proves that "Russia is doing just fine".

"Figure it out."

Again, you can't come up with an accurate measurement by using the standard USD world measuring system. It's focused on the way the USD system does things.

The Foreign Currency Exchange (Forex) trades in the range of $5 trillion dollars a day. Bitcoin and BRICS are almost nothing when compared with the Forex. But Bitcoin isn't even 15 years old, and BRICS is barely older... and already they have a market share that scares the standard system.

The new system is rising, while the old one is failing. The failure might not be seen among the common people, yet, but it is the movement of things that are coming.

[paxmao]

Name a measuring method which proves that "Russia is doing just fine".

Here is an interesting article in the Washington Post about this. Its essence is that more than 90% of Western sanctions against Russia are a fiction. It seems that few Western companies want to lose the Russian market, even declaring the opposite in words. Maybe that's why the effectiveness of sanctions is so low?

There is no problem selling coffee to the RF citizens, nor even providing consulting. That is absolutely fine.

At least now you understand why people in Russia don't take to the streets to overthrow Putin. Very little has changed in their daily lives since the start of the special operation in Ukraine.

Now, try to find the technology you need to produce modern means of fighting and modern means of production and you will know why there are T-55s in the frontlines. What is next? T-34s?

The RF economy is unlikely to collapse big time like a super-nova style explosion. But the erosion is there, as it happened with the USSR: the young and prepared leave, the citizens have to be forced into conscription, growth is stagnant for a BRIC country...

But what is more, things are unlikely to go back to where they were. Putin's war of aggression has permanently damaged RF stance in the world.

I do not think that Russia has any serious problems with the production of modern types of weapons. I don’t know where you got this story about the T-55 from, but this is hardly a mass case, perhaps a single episode, or even a fabrication of Ukrainian propaganda. The Nizhny Tagil UralVagonZavod alone produces several thousand armored vehicles a year, including hundreds of T72B3 and T90M main battle tanks. This is several times more than the entire united West can transfer to Ukraine without compromising its own combat readiness.

False information. The RF is unable to produce "several thousands" of any type of tank, not even 500 per year! On top, lacks the components that make all the difference in the battlefield. You can even produce a T-90, but without the controlling system, good quality night vision and proper support from high-tech requiring combined weapons warfare it means nothing.

https://www.forbes.com/sites/davidaxe/2023/02/17/the-russian-army-could-run-out-of-tanks-in-a-few-years-what-happens-then/

https://www.businessinsider.com/russia-demand-tanks-outstrips-production-by-factor-of-10-report-2023?r=US&IR=T#:~:text=In%



Daily life has not changed, except for those forcibly mobilised and the thousand of dead RF citizens that died for nothing in a foreign soil, the hundreds of thousands prepared Russians that left the country to avoid the draft, and the mothers of all the dead young and unprepared conscripts.

Winter is coming.

Russia has just one tank factory, which can produce around 20 new tanks every month.
Demand for tanks is now outstripping production by a factor of ten, according to The Economist.
Russia is losing around 150 tanks a month in Ukraine, and is becoming reliant on refurbished vehicles.

It’s a matter of intensive debate just how many recoverable tanks Russia has in storage. Novaya Gazeta estimated there are 8,000 “preserved” tanks. But one open-source analyst counted 10,000 T-72s, T-80 and T-90s in the war reserve.

The problem is, most of those tanks are lined up tread-to-tread in outdoor parks, where they’ve been exposed to rain and cycles of cold and hot that have rusted metal, rotted rubber and degraded sensitive optics.

The open-source analyst assumed just a third of the 6,900 stored T-72s are recoverable. Maybe half the 3,000 T-80s realistically can be restored. There also are a couple hundred new-ish T-90s in storage, most of which should be in reasonably good condition.

So in fact, Russia might have as few as 3,800 repairable tanks in reserve. A Russian source told Novaya Gazeta that Uralvagonzavod and Siberia-based Omsktransmash can restore 600 old tanks a year on top of the 250 new T-72s and T-90s Uralvagonzavod can build.

[Tytanowy Janusz]

Again, you can't come up with an accurate measurement by using the standard USD world measuring system. It's focused on the way the USD system does things.

Fair point. So show me a Russian style measuring system that shows that "everything is fine".

The new system is rising, while the old one is failing. The failure might not be seen among the common people, yet, but it is the movement of things that are coming.

US is 500 year old. Russia is 1200, China more than 5000 years. It is not the west that is the failing old system. It is totalitarian, communist countries that are collapsing, and temporarily, due to local propaganda, their citizens think otherwise.
The BRICS is trying to get the dollar out of international transactions, but people will choose the dollar anyway. Even if the BRICS bases its currency on gold. No one will trust that these reserves exist and will not be nationalized as soon as the need arises. No one wants to own currency associated with "terrorist sponsorship country".

[Zlantann]

It's interesting to see how Russia was able to withstand the heavy sanctions placed upon them, and how they had been taking steps to "sanctions-proof" their economy since 2014. It's clear that their ability to shift their focus and find alternative trading partners was a key factor in their resilience. It shows the importance of adaptability and resourcefulness, especially in times of economic hardship. Nonetheless, the ongoing SMO and continuing sanctions have undoubtedly had a significant impact on both the Russian economy and its citizens.

Just as Russia underestimated the military might of Ukraine and its partners, NATO underestimated the economic power of Russia. There were predictions by notable Western economists that the Russian economy will collapse after a few months of these coordinated sanctions. But these predictions failed because Russia has prepared for this invasion for many years. Russia successfully diversified its trade partnership before the invasion.

Russia currently wields enormous influence in many Asian and African countries. Kremlin has successfully joined forces with nations that are not pleased with the influence of the US. Countries like Syria, the  Democratic Republic of Congo, Sudan, Mali, and the Central African Republic (CAR) are all under the control of Russia through Wagner. These African nations are rich in precious stones such as diamonds and gold and Russia is using these resources to sustain its economy.

Russians have also contributed to the economic prosperity of Russia. Many of them have successfully taken over businesses that were affected by these Western sanctions. And most of these abandoned businesses have been successfully run by Russians and their quality products are competing favorably with Western brands. And Russian have embraced locally produced goods and services.

[Jamala]

you make one mistake in your reasoning that leads to completely wrong conclusions. You forget that such a large organism as a country with over 100 million citizens, with the largest area, based on strategically important raw materials, does not collapse in one day. These are the months/years during which little can be seen until the subcritical stage is reached, which is the beginning of rapid changes. So the fact that russia hasn't collapsed in 1 year is not proof that russia's economic isolation doesn't work.

What we already see:
1- the Russian currency has lost 30% against the dollar in the last 100 days
2- in the first three months of 2023, russia exceeded the budget deficit planned for the whole year
3- demographic problems caused by young people fleeing the country
4- rising tensions in some regions of Russia, which may result in a breakaway from Russia.

Why 2022 wasn't so bad for russians? Because of the inflationary panic and unrest related to the war that inflated the prices of raw materials in the short term, which increased the revenues to the budget. The temporary pump is over, raw materials are back down to the levels prior to the war, and the beginning of 2023 looks like the beginning of a disaster.

I accept that western sanctions have created pockets of holes in Russia economy, it also have made Russia explore alternatives. Now, they have broaden their trade relationships with China and India, two of the most populated countries. These sanctions have created stronger bond between BRICS counties with new members queuing to join the alliance. These sanctions would come and go, and the only country that got deceived was Ukraine.

[Jamala]

Name a measuring method which proves that "Russia is doing just fine".

It's called BRICS. You can ask the Russians how the measurement works. Brazil is the first letter of BRICS, and Russia is the second letter. Figure it out.

Ooh Lula La! Brazil Wants To Dedollarize Too

"and over 16% share in the world trade*." yep. only 16% ... including BRICS/nonBRICS countries trades settled in dollars. So non dollar trades are most likely below 10%. Nothing to be worry about so far.

Countries can try to dedollarize, but people will run to the dollar either way. Nobody wants Russian or Chinese currency. Countries where you can go to jail for saying something that goes against local propaganda.

The fact, that russia is part of BRICS (so far) is not a "measuring method" which proves that "Russia is doing just fine".

"Figure it out."

The US have being weaponizing the dollar for years, causing economies to collapse, and if not that Russia have a strong spine, it would found itself in a terrible state, maybe like Venezuela or Zimbabwe. But when and if BRICS finally come up with a rival  currency, the dollar will be devalued. Most African countries will definitely review their dollar trading policies in the coming months and years. Let's just pray for a peaceful world.